Monthly Archives: January 2010

Fraud fighters from around the country gathered at the National Institutes of Health near Washington, D.C. yesterday to focus on taking the fight against health care fraud to the next level. Sponsored by the Departments of Health & Human Services and Justice, the gathering was the first of its kind that brought together federal program managers, private insurers, technology experts and policymakers. More than 300 people attended the event.

The summit featured a good mix of prepared presentations and speeches (including those by AG Eric Holder and HHS Secretary Kathleen Sebelius) along with hands-on breakout sessions that strategized five key areas. A theme throughout the day-long summit was the need for greater information sharing and building more partnerships between public and private sectors. In wrapup remarks, deputy HHS secretary William Corr spoke of the need to create a “national network of collaboration” to further anti-fraud efforts in all sectors.

There was no new ground broken at this summit, but enlightenment was obvious all around as people from diverse areas of the fraud-fighting community were introduced to aspects of fraud perhaps for the first time. The federal government has a vast infrastructure involved in combatting fraud and it seemed some people who should be well acquainted with each other were meeting for the first time. State fraud bureau directors interacted with their federal counterparts. Government representatives traded strategies with private insurers. Many also seemed to learn for the first time that there’s a good deal of health care fraud in the property/casualty sector. During the breakout sessions and during breaks, business cards were exchanged freely and new acquaintances were made. The benefits of such exchanges will never be known, but it can only help.

Appreciation also seemed to grow for the challenges that others face in combatting fraud. Medicare — the 800-pound gorilla of health insurers — faces special obstacles in resisting fraudulent claims. It’s hard to imagine having to process 1.4 million claims a day with a mandate that providers must be paid within 14 to 30 days. And then when a suspicious claim is delayed, a well-connected provider leans on a congressman who then leans on Medicare. Can’t imagine any such scenario in the private sector.

Medicaid — Medicare’s poor cousin out in the states — also faces its own challenges, specially the lack of resources to combat fraud effectively. The federal government demands states crackdown on Medicaid scams, but provides little financial assistance when you consider the potential amount of money lost each year.

But as much as speakers, panelists and participants bemoaned the problem, they also discussed a variety of new solutions and promising ones for the future. Secretary Sebelius talked of combining various government databases into one to allow for in-depth datamining. Simple things such are random visits to durable medical equipment suppliers also are producing solid results. “The day when you could just hang out a shingle and bill Medicare is over,” she said proudly. She also said President Obama’s upcoming budget proposal will include $1.7 billion to combat fraud.

AG Holder recounted a litany of impressive successes in investigating and prosecuting high-level cases during the last year, but said it can only be a start on much more aggressive efforts by the Justice Department. To enhance federal efforts, he said, “we must seek out guidance from the private sector.” Wise words from someone of his stature.

Holder also responded to specific criticism expressed in FraudBlog two weeks ago about the seeming over-reliance on civil settlements instead of criminal sanctions against some of the worst fraud offenders. He revealed that the case in question — Forba Dental Management and its Small Smiles clinics — will include criminal investigations against individual dentists.

There were other eye-opening presentations, including one from a prosecutor in South Florida who discussed how they streamline complex fraud cases into a fast-track system to bring them to fruition in weeks rather than in two to three years they did previously.

A full report of the proceedings will be published soon by the sponsors that hopefully will include recommendations for concrete steps to fulfill the promise of the summit. We also are holding out hope that a formal partnership can be created between private and public sectors that will give guidance to future relationships and create a more permanent and lasting relationship beyond the current administration.

Secretary Sebelius concluded her remarks by saying “the message of this summit to the criminals who steal from health care is: ‘your days are numbered.'” Let’s hope so.

HHS reached out to the Coalition for guidance in planning this summit. We in turn brought in NICB, NHCAA and NAIC as partners in this endeavor. It was an excellent illustration of high-level collaboration that produced solid results. Special congratulations to HHS staff for producing a high-class event. Written presentations and video from the event can be viewed on the government Medicare fraud website.

Insurance fraud will be a topic in movie theaters across America tonight with the premiere of St. John of Las Vegas. It’s a story about a down-on-his-luck ex-gambler who gets hired as an investigator by an insurance company and is sent to Las Vegas to check out a suspicious auto accident claim. Film critics say the movie is awful (see review below), but I don’t care. I’m going to see it anyway as a tribute to the hard-working, dedicated investigators everywhere.

With stars like Steve Buscemi and Sarah Silverman and big-fish producers such as Spike Lee and Stanley Tucci on board, you’d think this indie would offer some glimmer of wit or originality. Think again. Saint John of Las Vegas, writer- director Hue Rhodes’ excruciatingly awful feature debut, is a shaggy road movie to nowhere. An uncharacteristically bland Buscemi plays a gambling addict/insurance-fraud investigator who stumbles across a series of ”quirky” characters (a stripper in a wheelchair, a gun-crazy nudist, and a human-fireball carny) while trying to debunk a claim. Sound painful? You didn’t have to sit through it, pal.

Michel De Jesus Huarte of Miami was quite the entrepreneur who set up a chain of medical clinic in southern states. From 2005 to last year, operating out of storefronts and post-office boxes, his clinics rang out more than $100 million in bogus bills for treatment. He pocketed about $25 million from the federal government alone.

Huarte was sentenced to 22 years in federal prison yesterday. His sentence is the latest in a string of notable successes the U.S. Justice Department has achieved in putting such ringleaders away for a long time.

In a news report about the sentencing, this tidbit also was notable:

“The ring exploited not only Medicare but also private insurers…”

This happens more than most people realize. Crooks go where the money is.

That’s a key reason why there should be greater coordination on anti-fraud efforts between private insurers and federal insurance programs. Our hope it that enhanced cooperation is one by-product of the National Health Care Fraud Summit being held today.

InsuranceFraud.org has chronicled the growing practice by scam artists of using kids in fraud schemes, such as the woman from Virginia who staged car crashes with her three young ones in the back seat. The latest case to surface involves systematic corporate greed, using low-income families to rip off Medicaid.

The U.S. Department of Justice announced a $24 million settlement today with Forba Dental Management which operates Small Smiles clinics in 22 states. Forba is accused of pressuring its clinic managers to perform needless and mostly painful procedures on kids. Local tv news reports show gruesome images of very young children being strapped down and undergoing root canals and other serious dental work. Teeth are pulled needlessly, according to reports. Kids are left traumatized and in some cases, damaged for life.

Forba has the gall to post its “pledge” to parents on its slick website that includes such things as “We will work tirelessly to ensure that every child receives the best dental care provided with compassion and kindness.” Right.

Civil settlements like these help to punish corporations that defraud, and hopefully send a clear message of deterrence.

However, I wish someone from the Justice Department would explain why no one from Forba is going to jail. These crimes are extreme and ruthless. Sorry, but a civil settlement here doesn’t fit this crime. And one other thing: Go watch the videos on this news site and think about looking these kids in the eyes and telling them that since the government is a few million dollars richer, everything’s alright.

Update – 1/28/10: Individual dentists are being investigated for possible criminal sanctions, Attorney General Eric Holder mentioned during the National Heath Care Summit this morning. FraudBlog will continue to monitor this case.

Arsenio Freitas of Billerica, Mass. grew tired of making payments on his 2008 Chevy Silverado so he allegedly asked his cousin Eduino to help him take the vehicle down to his favorite fishing hole and make the Silverado disappear. As the truck slowly submerges in the water, the pair flee the scene. A few minutes later, a passerby notices the truck and calls 911, thinking this could be a tragic accident with lives at risk. According to a report in a local newspaper:

The blue and red lights slash the darkness at the Ashland Reservoir’s Spring Street edge. Spotlights search the water for anyone, everyone, who might be trapped, drowning or dead. Firefighters, police, EMTs, the chiefs assemble to perform the tasks they’ve drilled so many times. Six towns coming together to do whatever it takes to save a single life.

A Southborough ambulance stands ready to rush the victim or victims to the hospital. Divers from Ashland, Holliston, Hopkinton, Northborough, Sherborn and Southborough make their way through the cold, dark water as reporters wait for word on what is found.

The tow truck moves to the edge of the boat ramp to pull out the Silverado. Something goes wrong. A tow line snaps. A piece of the buckle breaks. An EMT is loaded into the ambulance.

This happened in November. The injured EMT, firefighter Robert Gianopoulos, still hasn’t been cleared to return to work. He’s undergone numerous procedures to heal the injuries he suffered that night. “It’s not just the insurance company getting hurt here,” town manager John Petrin was quoted in the local newspaper.

The cost to taxpayers to respond to this alleged scam was more than $10,000, not counting Gianpoulos’ medical costs. Arsenio Freitas now faces a host of charges and a few years in jail, if convicted.

People who are tempted to ditch their cars in lakes or burn them in deserts need to understand they place people lives in jeopardy. Perhaps a stiff sentence in this case will help people understand that.

* * * *
Thanks for former IASIU president Dan Fitzgerald for bringing this case to our attention.

At a time when many school districts are laying off teachers, cutting back on classes and increasing class size, six districts in Pennsylvania likely will have to come up with several hundreds of thousands of more dollars to pay for workers compensation and liability insurance. The districts in Berks County will have to bear the extra expense because they allegedly were defrauded by a couple of agents to the tune of more than $1 million. The money they dished out for insurance was used by the agents to buy luxury cars, expensive wine and other personal items — while the school districts went bare, coverage-wise.

The AG’s Insurance Fraud Section arrested cousins Kevin and Robert Pickell yesterday for defrauding the schools. They face up to 20 years in prison if convicted. In announcing the arrest AG Tom Corbett said “because the schools are all publicly funded, the true victims in this case are the taxpayers who live in those communities.” While true, it’s likely the kids will suffer as well because I doubt the school districts have an extra $1 million laying around to replace their insurance coverage. After-school programs, art classes, new books, teacher raises are usually the kinds of things cut when schools face budget crunches.

Fraud by insurance agents is on the rise across the country. A recent study by the Coalition found that a whopping 69% of state fraud bureaus say cases involving crooked agents increased in the last year. Nearly 40% reported the number of agent cases were “much higher.” Unless consumers become more sophisticated in dealing with agents — and regulators become more vigilant — we’re likely see many more stories like the one out of Pennsylvania this week.